Bitcoin price saw a correction by more than $1,000 as the equity markets also opened in the red, is there any chance for recovery?
Bitcoin price has dropped by more than $ 1,000, hitting an intraday low of $ 22,430. However, at press time, Bitcoin rallied again in the $ 23,000 zone. Apparently, Bitcoin’s latest bearish move comes as a correction to neutralize its overbought conditions.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price reversed its uptrend after recording $ 24,300 as a record high
Meanwhile, the US dollar – often trading inversely against Bitcoin – is also trying to recover from its overbought conditions. The dollar rose 0.78 percent on Monday as its demand in Europe rose after the UK imposed new COVID-19 restrictions.
Britain has become a place to spread a new strain of coronavirus which, according to UK Health Minister Matt Hancock, is 70% more infectious than the previous virus. Although coronavirus variant VIU-202012/01 may not be dangerous, it is not resistant to vaccines.
On the 4-hour chart, a bearish divergence shows the breakdown from $ 24,000 to Monday’s lows of $ 22,000. However, zooming out, this is still significantly higher than Bitcoin’s price three months ago while such corrections are very common in both bull and bear markets.
If that rejects at $ 23,400-23,600, more downside is on the table and the higher timeframe levels will be tested as support. However, if this $ 23,400 – 23,600 breaks to the upside, a new all-time high before the year’s end is likely.
Top Bitcoin traders believe its fall on Monday comes after trading discrepancies on futures charts. Looking back, Bitcoin Futures listed on the Chicago Mercantile Exchange left a missing candle over the weekend. People think spot rates tend to move in the direction of these missing gaps to fill them 9/10 times. So with its latest move, spot Bitcoin is just trying to fill the void.
There are still two more candles to be filled in the next session. A trader with the moniker raised it in the chart above, raising the outlook for Bitcoin’s price to fall further to $ 18,115 and $ 16,995.
Medium-Term Prospects US Dollar is still going down thanks to Fed’s commitment to continue its bond program buy it indefinitely and the decision of US congressional leaders to pass a $ 900 billion stimulus package to assist American small businesses and households to suffer the economic consequences of the COVID -19 pandemic.
That paints a colorful technical picture for Bitcoin – at least on the lower timeframe charts. The cryptocurrency’s one-hour chart shows the price in a consolidation trend even after its latest bearish action. It notes that BTC/USD can still recover up to or above $ 24,000.
You can see the BTC price here.
Read more:
- Flows And Liquidity Report Of JPMorgan: Bitcoin Price Will Reach $ 650.000 If The Capitalization Increased Equally To Gold
- MicroStrategy Bought 29,646 Bitcoin Worth $650 Million